News Alert – SIPP Capital Change

The FCA has outlined final capital rules for Self-Invested Personal Pension (SIPP) operators,

There are approximately £2 trillion of pension assets under management in the UK pensions industry. Around £100bn of these assets are administered through SIPPs.

In November 2012 the Financial Services Authority (FSA) consulted on a new regulatory capital framework for Self-Invested Personal Pension (SIPP) operators. Reflecting feedback the FCA has now made some amendments to the rules, which will come into force on 1 September 2016.

Most SIPPs are personal pensions where the consumer has more investment options than a normal personal pension. The FCA’s prudential rules do not differentiate by the product, but rather the type of provider. However, the vast majority of firms affected by these rules market themselves as SIPP operators.

In light of feedback, the FCA has made some changes to the original framework they consulted on, which will mean a sizeable reduction in the total capital requirement for a significant number of firms. However, some firms will need to raise additional capital to comply with the rules and they should start planning for this to ensure sufficient resources are in place by the implementation date.

As a consequence of this and other changes, the FCA expects a significant number of SIPP providers to exit the market. Complyport’s view is that this is likely to lead to consolidation opportunities for properly capitalised firms. But there are risks where acquired firms’ systems and controls have been inadequate and firms have dealt with non-standard assets.

Our experts are able to help firms assess the impact and prepare for changes. In particular the following services may be appropriate:

Send Us A Message

Please leave this field empty.

indicates required field

We use cookies to analyze site traffic and help us understand how users are using our website, allowing us to improve your browsing experience. No personal data is collected. Click here to view our Cookie Policy.